Today everyone knows about crowdfunding websites, but how was GoFundMe built? It was one of the first of its kind and today you’ll hear the story of its inception, formation and reformulation and its tremendous growth.
Joining us for this edition of CTO Studio is Andy Ballester, one of the co-founders of GoFundMe. Today Andy and his co-founder Brad Damphousse sit on the board of GoFundMe, but our discussion will take you back to the beginning when it was just Andy and Brad and an idea. Listen in for their fascinating journey, and lessons you can learn from their experiences.
In this episode, you’ll hear:
- Why is there always a reason to rewrite?
- Why was it so important for Andy and his co-founder to answer phones and speak with their customers early on?
- How did Kickstarter help them in their early stages?
- How the social aspect influenced the creation of GoFundMe.
- Why did they switch to WePay and how did it explode their growth?
- And so much more!
When Andy and Brad started GoFundMe they had met in San Diego when they worked at the same start-up. They found they worked well together and built a lot of products as a team. So when the idea of GoFundMe came about it didn’t matter that Brad was in LA and Andy was in San Diego. They had always known if they came up with the right idea they could build something interesting together, and they thought they had it with GoFundMe.
As with most things, GoFundMe started off as another idea. Initially they were going to create something that would help people save money for items they wanted, they called that original product Coin Piggy. As they built it out on paper they found that if they had people saving on online merchant accounts (like PayPal) it would be like a savings account with a negative 3% interest!
So out of the gate it was not a good product, but they had a lot of use cases to explore. They could see the social aspect was interesting, and that sparked something. They thought forget about people saving up for what they wanted individually, and instead considered what could people save up for socially?
Andy says it was like they backed into this idea of personal fundraising. They built out a product over the next six months called CreateAFund, which was the predecessor of GoFundMe. For two years they took that product and tried to find a fit for it, and tried to explain and educate people about it.
At the time Kickstarter was out there but their project was different. Kickstarter was product-based and was built around the idea that you could help start-ups in a non-equity way.
He says they have tremendous respect for Kickstarter and what they were doing and have done. Andy believes they owe a lot of the initial easing of their use case into society because of Kickstarter’s early viral campaigns.
Before they could rebrand and relaunch, Andy and Brad had to find ways to bootstrap their company. Often they would take consulting gigs and Andy got to build on a lot of different platforms as a result, he saw interesting features from some along with the drawbacks of others.
But it helped him and Brad, his co-founder, to know they wanted something that was lightweight in terms of the engineering. Symfony’s blank skeleton at the time was 11,000 files and that just seemed like too much code and too complex for the use case they wanted to solve. As a result they started off with a mixture of open source and some custom code, in total it was only about 6 files to manage.
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Taking Andy back to the rebrand, I asked if they modified the existing code or did they do a rewrite? It was mainly a rewrite he says. The methodology for the MVC layer was mainly the same so a lot of the core classes came over. However the front was so different as was the feature set so a lot of that code had to be written from scratch. It was a hybrid kind of rewrite, everything got touched to some degree. Dev time was extraordinarily precious at the time! He was the only coder and his co-founder Brad was doing all of the design and all of the CSS. They had some outsourced help for some of the HTML, but that HTML didn’t go very far in the company’s life cycle.
So with the rebrand under their belts and two years of bootstrapping, they launched in May 2010. They got some traction early on thanks to a TechCrunch article, along other articles published in the tech world and local press coverage in San Diego. Even though they were hopeful for the new PayPal APIs there was still parts missing.
To explain more Andy takes us back to how he and Brad met. They met at a start-up where creating viral loops was the entire name of the game. They were very good at creating viral loops on email, so back then (in 2005 and 2006) all of the different email providers were interesting places to do viral marketing.
But by 2010 it was all about Facebook. Facebook was the de facto platform everyone was on and they thought they could do some interesting mechanics to create a viral loop (a loop by which one person tells a hundred people and more than one person comes back in as a result of that loop). It was a very natural extension of what their product is because viral loops are all about alignment. You have alignment with the campaign organizer, they in turn want to tell as many people as possible. People donating want this person to get help and want to move this cause forward so they want to tell as many people as possible, and they wanted them to tell as many people as possible.
In short it all works out if they make telling people as easy as possible, then they could get that marketing funnel to more than 1.1 users. The problem is the two times where it would be natural to ask those questions, when the campaign organizer was setting up their campaign and when someone was donating, they had a PayPal step right before each of them. So one of the early pain points was users had to put in their social security number as a campaign organizer (in order to sign up for a PayPal merch account), which is a terrible thing to do when someone is first signing up with your company. They realized they needed their users to trust them and the users would also need an incentive.
The other problem they ran into was on the donation side, they had to actually send a physical link to a PayPal payment form. Half of the time that link was broken, and in general the interaction between that form and the person trying to use it was poor. They talked to PayPal about it and they did make changes, but those changes happened slowly. They felt like they had a Ferrari but there was a spark plug missing and without that spark plug they weren’t going to get anywhere.
But they did get things going and Andy describes how on today’s show. He also tells us why they never wanted to be the middle man for the funds, when he knew they were on to something with GoFundMe, and where GoFundMe is today. We wrap up with lessons about being a CTO, including how he and his co-founder knew it was time to let go of their creation. You’ll hear all of that and much more with Andy Ballester on today’s CTO Studio.